Bovine Company, a wholesale distributor of umbrellas, has been experiencing losses for some time, as shown by its most recent monthly contribution format income statement: Sales Variable expenses Contribution margin Fixed expenses Operating loss $2,040,000 820,260 1,219, 740 1,313,000 $ (93,260) In an effort to isolate the problem, the president has asked for an income statement segmented by geographic market. Accordingly, the Accounting Department has developed the following: Geographic Market South Central North $604,000 $803,000 $633,000 Sales Variable expenses as a percentage of sales Traceable fixed expenses 54% 30% 40% $324,000 $534,000 $304,000 Required: 1. Prepare a contribution format income statement segmented by geographic market, as requested by the president Geographic Market Total Company South Central North 2-a. The company's sales manager believes that sales in the Central geographic market could be increased by 15% if monthly advertising is increased by $29,000. Calculate the incremental net operating income. Incremental net operating income 2-b. Would you recommend the increased advertising? Yes No